Key points of investment
Company announcement: NIO's 2022 Q3 revenue was 13.002 billion yuan, +32.61%/+26.33% compared to the same period, of which vehicle sales revenue was 11.933 billion yuan, +38.16%/+24.68% compared to the same period last month. Q3 gross margin was 13.30%, -7.03/+0.30pct respectively over the same period; gross margin of vehicle sales was 16.40%, and -1.65/-0.30pct respectively over the same period last month. In the end, net profit attributable to ordinary shareholders of NIO Q3 was -4.142 billion yuan (2021Q3 was -2.9 billion yuan, 2022Q2 was -2.75 billion yuan). As of September 30, 2022, the company's cash and cash equivalents, restricted cash, and short-term investments amounted to RMB 51.4 billion.
Q3 Revenue performance was good, and we continued to invest heavily in R&D. 1) Delivery of new models increased Q3 sales performance, and revenue increased positively over the same period last month. The new model ES7/ET5 began to be delivered +ET7 delivery continued to climb. The company delivered a total of 31,600 vehicles in Q3, +29.33%/+26.13% over the same period last year. As a result of the improved product structure, bicycle revenue continued to rise year over year and remained stable month-on-month. The revenue of 2022Q3 bicycles was 377,500 yuan/vehicle, +6.83%/-1.15% over the same period last month.
2) In the same period last year, it was confirmed that the increase in credit revenue plus battery costs affected gross margin performance. Q3 gross margin was -7.03pct year over year, and the month-on-month performance remained stable. 3) Marketing activities in China/Europe increased & sales networks continued to expand, R&D investment continued, and cost rates increased month-on-month. The 2022Q3 quarterly R&D expenditure rate was 22.65%, +10.48pct/+1.76pct, respectively. The main reason for the increase in the R&D cost rate was the increase in the cost of R&D functional personnel and the increase in incremental design and development costs for batteries, chips, etc.; the SG&A cost rate was 20.86%, +2.25/-1.31pct respectively over the same period. The year-on-year increase in the SG&A cost rate was due to the expansion of the sales and service network and the increase in marketing and promotion activities in the Chinese market and Europe. The month-on-month decline was mainly due to channel sorting and increased store efficiency, up to 9 At the end of the month, the company distributed a total of 77 Weilai centers and 341 NIO spaces nationwide, compared with the end of June, +22/-18, respectively. 4) Under the influence of the above combined factors, Q3 bicycle losses increased month-on-month. In the end, the company achieved net profit (including minority shareholders' equity) of 4.111 billion yuan in Q3. The loss of bicycles in Q3 was 131,200 yuan (2021Q3 was 34,200 yuan, 2022Q2 was 110,000 yuan).
Profit forecast and investment rating: Considering increased competition in the industry, we lowered the company's 2022-2024 performance forecast. Revenue was 506.96/983.36/154.404 billion yuan respectively (originally 57255/896.39/144.208 billion yuan), and net profit attributable to common shareholders was 11.840/-79.28/253 billion yuan (originally -73.39/53.14/-2,418 billion yuan). Maintain a “buy” rating.
Risk warning: supply chains such as chips/batteries are unstable; tightening of software OTA upgrade policies, etc.